THE PLAN SO FAR Initial deal to include restoration of low- or zero-duty benefits to certain Indian exports under GSP, and market access for both nations’ agri products; larger all-encompassing FTA to include services, IPR investments.
The first leg of the India-US trade deal will largely be about tariff concessions on goods and would be concluded in around three months. A larger free trade agreement (FTA) would be all encompassing, and include aspects other than goods such as services, intellectual property rights (IPR) and investment, officials said.
The initial deal is likely to include restoration of benefits of low or zero duty to certain Indian exports under the Generalised System of Preferences (GSP), and market access for each other’s agricultural products.
“The first leg is what has been negotiated in the last one-odd year and that includes GSP restoration, access for our agricultural goods and correspondingly theirs,” said an official.
While dairy is part of the negotiations, automobiles and e-commerce are not, the official said.
Though India’s exports under the GSP product lines rose 5.5% on year in the June-December period of 2019, faster than the 1.9% rise registered in total exports to the US in the same period, the commerce and industry ministry has identified the sectors where exports have declined or exporters need GSP such as in textiles and leather footwear.
“We are moving towards and FTA and will make certain tweaks in the contours to include these in the FTA. GSP, for instance, can be tweaked,” said the official.
The FTA, however, will go beyond goods to incorporate IPR, investment and services including issues related to visas and manpower movement — India’s key demand.
“The FTA will include many more issues. The limited deal is about goods and market access largely,” said another official.
As per the first official, a limited scale trade deal will instill confidence in industry that things are moving forward till the time an FTA is finalised. Sources said the United States Trade Representative has begun the filing process to initiate FTA talks. The US Trade Promotion Authority requires the administration to notify Congress ninety calendar days prior to entering into a trade agreement.
”We are moving towards an FTA and will make certain tweaks in the contours to include these in the FTA. GSP, for instance, can be tweaked,” said the official.
Sources said the US Trade Representative has begun the filing process to initiate an FTA.
